SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
6-K
REPORT OF
FOREIGN PRIVATE ISSUER
PURSUANT
TO RULE 13a-16 OR 15d-16 UNDER
THE
SECURITIES EXCHANGE ACT OF 1934
For the
month of February 2009
.
FOMENTO
ECONÓMICO MEXICANO, S.A.B. DE
C.V.
(Exact
name of Registrant as specified in its charter)
Mexican
Economic Development, Inc.
(Translation
of Registrant’s name into English)
United
Mexican States
(Jurisdiction
of incorporation or organization)
General
Anaya No. 601 Pte.
Colonia
Bella Vista
Monterrey,
Nuevo León 64410
México
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual
reports
under
cover of Form 20-F or Form 40-F:
Form
20-F x Form
40-F o
Indicate
by check mark if the registrant is submitting the Form 6-K in paper
as
permitted
by Regulation S-T Rule 101(b)(1): _______
Indicate
by check mark if the registrant is submitting the Form 6-K in paper
as
permitted
by Regulation S-T Rule 101(b)(7): _______
Indicate
by check mark whether by furnishing the information contained in
this
Form, the registrant is also thereby furnishing the information to the
Commission
pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.
Yes
o
No x
If "Yes"
is marked, indicate below the file number assigned to the registrant
in
connection
with Rule 12g3-2(b): 82-_____________
SIGNATURES
Pursuant to
the requirements of
the Securities Exchange Act
of 1934, the
registrant has
duly caused this report to
be signed on its behalf of the
undersigned,
thereunto duly authorized.
.
| FOMENTO ECONÓMICO MEXICANO, S.A. DE C.V. | |||
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|
By:
|
/s/ Javier Astaburuaga | |
| Javier Astaburuaga | |||
| Chief Financial Officer | |||
Date: February
26, 2009
 |
FEMSA Delivers Double-Digit Growth
in 4Q08 and 2008
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Operating Income increased 15.0%
in 4Q08 and 14.9% in 2008
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Monterrey, Mexico, February 26,
2009 — Fomento Económico Mexicano, S.A.B. de C.V. (“FEMSA”)
announced today its operational and financial results for the fourth
quarter and full year 2008.
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Fourth Quarter 2008
Highlights:
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· Consolidated total revenues
grew 15.4% and income from operations grew 15.0%. In spite of the
increasingly challenging economic environment and a more cautious
consumer, FEMSA delivered robust growth in operating income driven by
strong results at Coca-Cola FEMSA and FEMSA Comercio that more than offset
the mixed results at FEMSA Cerveza.
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· Coca-Cola FEMSA total revenues
and income from operations increased 23.9% and 25.7%, respectively.
Driven by double-digit income from operations growth in Mercosur and
Latincentro and robust growth in Mexico.
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· FEMSA Cerveza total revenues
increased 8.6%. In an environment of healthy pricing and lapping
solid 6.0% volume growth in 4Q07, sales volume decreased 0.7% in Mexico.
In Brazil, volumes declined 3.5% having grown 9.3% in 4Q07, and as a
result of unfavorable weather conditions. Export sales volume grew a
robust 12.3%, despite the decline in the overall US import category.
Continued raw material pressures and sustained marketing investments
behind our brands across our operations resulted in a 9.3% decrease in
income from operations.
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· FEMSA Comercio continued its
pace of strong growth and margin expansion. Income from operations
increased over 27.0% for the 8th consecutive quarter, resulting in an
operating margin expansion of 110 basis points to reach 9.3%.
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2008 Full Year
Highlights:
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· Consolidated total revenues
increased 13.9%. All operating units contributed to this top-line
growth.
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· Consolidated income from
operations increased 14.9%, driven by double-digit growth at
Coca-Cola FEMSA and FEMSA Comercio.
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· Coca-Cola FEMSA total revenue
and income from operations increased 19.8% and 19.2%, respectively.
Strong growth in Mercosur, supported by the integration of Remil,
and by Latincentro, as well as more tempered growth in Mexico drove these
results.
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· FEMSA Cerveza total revenues
increased 7.1%, mainly as a result of increases in average price per
hectoliter across our main operations in local currencies. Income
from operations decreased 1.9%, reflecting continued pressure on raw
materials and sustained investment in our brands.
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· FEMSA Comercio income from
operations increased 32.6%, reaching an all-time-high operating margin of
6.5% and resulting in a 100 basis point expansion. For the 7th
consecutive year, income from operations increased over 25%, driven by the
opening of 811 new stores during the year as well as by stable same store
sales.
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José
Antonio Fernández, Chairman and CEO of FEMSA, commented: “2008 was a challenging
year for businesses across geographies and industries, and yet, we were able to
deliver double digit growth in revenues and income from operations. Over the
past decade, our results underscore the strengths of an integrated beverage
platform and continuous improvement driven at every stage of the value chain.
During the year, every one of our business units advanced in the execution of
our strategy, and today our competitive position and our skill set are stronger
than ever before.
As we
enter another tough year, the business environment continues to soften. Our
products are defensive in nature and we expect the impact of the downturn to be
relatively moderate, but clearly we are not immune and our consumers are going
through difficult times. However, in terms of the business drivers that are
within our control, we are taking broad measures to rationalize costs, expenses
and investments at every level of the organization, so that we are in a good
position to weather the storm and come out in even better shape than we are
today”.
FEMSA Consolidated
Beginning
on January 1st 2008,
in accordance to changes in the Mexican Financial Reporting Standards (Mexican
FRS) related to inflation effects, we discontinued inflation accounting for our
subsidiaries in Mexico, Guatemala, Panama, Colombia and Brazil. 2008 figures for
these subsidiaries are therefore in nominal pesos. For the rest of our
subsidiaries in Nicaragua, Costa Rica, Venezuela and Argentina, we applied
inflation accounting during 2008. For comparison purposes, the figures for 2007
have been restated in Mexican pesos with purchasing power as of December 31,
2007.
As
a useful reference, we note that local currencies in our major operations
depreciated against the US dollar during 2008, particularly during the fourth
quarter. The Mexican Peso depreciated approximately 25% in the quarter and for
the year, and the Brazilian Real approximately 32% and 22% in the quarter and
for the year, respectively.
Total revenues increased 15.4%
compared to 4Q07, to Ps. 44.816 billion. Coca-Cola FEMSA and FEMSA Comercio
together accounted for over 90% of the consolidated revenue increase, while
FEMSA Cerveza provided the balance.
For the
full year of 2008, consolidated total revenues increased 13.9% to Ps. 168.022
billion. This growth resulted from double-digit growth at Coca-Cola FEMSA and
FEMSA Comercio, combined with high-single digit growth at FEMSA
Cerveza.
Gross profit increased 14.8%
compared to 4Q07 to Ps. 20.945 billion in 4Q08. Gross margin decreased 30 basis
points compared to the same period in 2007 to 46.7%. FEMSA Comercio gross profit
improvement partially offset cost pressures at Coca-Cola FEMSA, coming from the
integration of Jugos del Valle, which is currently a lower-profitability
business, and the depreciation of the local currencies as applied to our US
dollar denominated cost, as well as raw material pressure at FEMSA
Cerveza.
For the
full year of 2008, gross profit increased 14.5% to Ps. 77.623 billion. Gross
margin rose 20 basis points compared to the same period in 2007 to 46.2% of
total revenues. FEMSA Comercio’s gross
profit increase more than offset raw material pressure at Coca-Cola FEMSA and
FEMSA Cerveza and the depreciation of the local currencies against the US dollar
as applied to our dollar denominated costs.
Income from operations
increased 15.0% to Ps. 6.712 billion in 4Q08 as compared to the same period in
2007; double-digit growth at Coca-Cola FEMSA and FEMSA Comercio more than offset
an operating income decline at FEMSA Cerveza. Consolidated operating
margin remained flat as compared to 4Q07 at 15.0%, FEMSA Comercio and Coca-Cola
FEMSA operating margin improvement offset margin pressure at FEMSA
Cerveza.
For the
full year of 2008, income from operations increased 14.9% to Ps. 22.684 billion.
Our consolidated operating margin for the year reached 13.5%, an improvement of
10 basis points as compared to the same period in 2007, as FEMSA Comercio
operating margin improvement offset margin pressure at FEMSA Cerveza and
Coca-Cola FEMSA.
February
26, 2009
2
Net income decreased
75.9% compared to 4Q07 to Ps. 868 million in 4Q08, reflecting a higher integral
result of financing during the quarter. This increase resulted from (i) a shift
from a gain to a non-cash loss in our foreign exchange position, due to the
depreciation of the local currencies in our markets against the US dollar, as
applied to our liability position, (ii) a shift from a gain to a loss in certain
derivative instruments that do not meet hedging criteria for accounting
purposes, driven by the mark-to-market recognition in our US dollar cross
currency swaps and to a lesser extent, the unwinding of certain commodity hedges
and iii) a shift from a gain to a loss in monetary position, reflecting changes
in the Mexican Financial Reporting Standards, as inflationary adjustment is no
longer applied to the vast majority of our liability position. During the
quarter, the increase in other expenses resulted mainly from write-off expenses
derived from asset rationalization at Coca-Cola FEMSA in Mexico. The effective
tax rate was 41.2% in 4Q08 compared with 31.5% in 4Q07, as a result of lower
income before taxes, and reflecting the change in the Mexican Financial
Reporting Standards, pursuant to which inflation adjustments are no longer made
for accounting purposes but continue to be made for tax purposes.
For the
full year of 2008, in spite of robust growth in income from operations, net
income decreased 22.3% compared to the same period of 2007 to Ps. 9.278 billion,
mainly due to the first two factors described above for the fourth quarter as
well as lower gains on monetary position. The effective tax rate was 31.2% in
2008 compared with 29.3% in 2007, reflecting additional tax provisions in some
of our operations which partially offset the same factors mentioned above for
the fourth quarter.
Net majority income decreased
77.8% over 4Q07, resulting in Ps. 0.16 per FEMSA Unit1 in 4Q08. Net majority
income per FEMSA ADS was US$ 0.12 for the quarter. Net majority income decreased
21.2% over 2007, resulting in Ps. 1.87 per FEMSA Unit1 (US$ 1.36 per FEMSA ADS)
for the 2008.
Capital expenditures increased
38.2% over 4Q07 to Ps. 5.409 billion in 4Q08, resulting from increased
investment in the beverage business units related to additional capacity and
distribution assets, and the accelerated expansion in store openings at FEMSA
Comercio. For the full year of 2008, capital expenditures increased 26.4% over
2007 to Ps. 14.234 billion for the same reasons.
The consolidated balance sheet as
of December 31, 2008, recorded a cash balance of Ps. 9.110 billion (US$ 658.6
million), a decrease of Ps. 1,346 million (US$ 97.3 million) compared to the
same period of 2007, mainly as a result of cash acquisitions made by Coca-Cola
FEMSA over the last twelve months, including Remil, and the payment of the
maturities of our certificados bursátiles during the year. Short-term debt was
Ps. 11.648 billion (US$ 842.1 million) while long-term debt was Ps. 31.275
billion (US$ 2.261 billion). Our net debt increased by Ps. 4.241 billion
(US$306.6 million) mainly driven by the appreciation of the US dollar as applied
to our US dollar liability position and by cash acquisitions described
above.
Consistent
with FEMSA’s conservative approach, as of December 31, 2008, our ratio of net
debt to EBITDA2 was
only 1.1x, while our mix of US dollar-denominated debt represented 22.6% and our
mix of fixed interest rate represented 55.0%. In terms of our debt profile, we
have approximately Ps. 11.6 billion coming due in 2009, we expect to refinance
Ps. 9.3 billion and to pay down the balance with internal cash generation. For
2010 and 2011, we have minor debt maturities, and our debt profile currently
extends as far out as 2017.
As a
matter of policy, FEMSA follows a conservative approach to leverage and risk
management and makes limited use of derivative instruments to reduce the
volatility and uncertainty of operating results by hedging risks such as
interest rate, foreign exchange and the price of certain raw
materials.
Soft Drinks – Coca-Cola
FEMSA
Coca-Cola
FEMSA’s financial results and discussion are incorporated by reference from
Coca-Cola FEMSA’s press release, which is attached to this press release or
visit www.coca-colafemsa.com.
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1
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FEMSA
Units consist of FEMSA BD Units and FEMSA B Units. Each FEMSA BD Unit is
comprised of one Series B Share, two Series D-B Shares and two Series D-L
Shares. Each FEMSA B Unit is comprised of five Series B Shares. The number
of FEMSA Units outstanding as of December 31, 2008 was 3,578,226,270
equivalent to the total number of FEMSA Shares outstanding as of the same
date, divided by 5.
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2
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As used herein, Net debt/EBITDA is calculated by dividing net debt at the end of the quarter by the EBITDA for year, as reported in Mexican pesos and converted to US dollars with the period-end exchange rate. |
Beer – FEMSA Cerveza
Mexico sales volume decreased 0.7% to 7.118
million hectoliters in 4Q08 compared with 4Q07. This decrease reflects an
increasingly cautious consumer as well as price increases implemented in the
first and third quarters of 2008. Our Tecate brand family had
another quarter of strong performance and our new line extensions, such as Sol Limón y Sal and Sol Cero, delivered
encouraging results. For the full year of 2008, despite solid volume growth
during the first half of the year, consumer demand softened during the second
half, reflecting strong pricing and tough comparisons, resulting in a 1.6%
increase in sales volume to 27.393 million hectoliters.
Brazil sales volume declined
3.5% in 4Q08 over a solid 9.3% volume growth in 4Q07, to 3.146 million
hectoliters. This decrease reflects price increases implemented at the end of
the third quarter, ahead of our competitors, and to a lesser extent unfavorable
weather conditions. For the full year of 2008, Brazil sales volume increased
3.9% to 10.181 million hectoliters outpacing industry growth for the second
consecutive year.
Export sales volume increased
12.3% in 4Q08, cycling a 19.3% growth in 4Q07, to 752 thousand hectoliters in
4Q08, despite a challenging economic environment in the US. This increase was
mainly driven by our Dos Equis
and Tecate
brands in the US as well as by Sol in other key markets. For
the full year of 2008, export sales volume increased 9.3% to 3.479 million
hectoliters, well above import category and total industry growth in the
US.
Total revenues increased 8.6%
over 4Q07 to Ps. 11.492 billion in 4Q08. Higher average price per hectoliter
mainly in Mexico, combined with solid volume growth in exports, drove these
results. Mexican beer sales represented 73.8% of total beer revenues, while
Brazil and Export beer sales reached 17.3% and 8.9% of total beer revenues,
respectively.
Mexico
price per hectoliter increased 10.0% over 4Q07 to Ps. 1,096.9 in 4Q08, resulting
from price increases implemented during the year as well as from the positive
pricing effect of incremental domestic volume brought under direct distribution
during the last twelve months, which now stands at 91% of our total domestic
volume. Brazil price per hectoliter in Mexican pesos decreased 1.7% to Ps. 583.3
compared to the same period in 2007, driven by the depreciation of the Brazilian
Real versus the Mexican Peso. However price per hectoliter in local currency was
5.8% higher, as a result of price increases implemented late in the year. Export
price per hectoliter in Mexican pesos increased 16.7% to Ps. 1,251.9 in 4Q08 as
compared with 4Q07, reflecting the Mexican peso depreciation versus the dollar.
In US dollar terms, price per hectoliter declined 1.8% due to changes in product
mix and moderate price increases implemented during the year.
For the
full year of 2008, total revenues increased 7.1% to Ps. 42.385 billion. Mexican
beer revenues reached 74.9% of total beer revenues up from 74.6% in the same
period of 2007. Brazil beer revenues represented 15.8% of total beer revenues,
down from 16.2% in the comparable period in 2007. Export beer revenues were 9.2%
of total beer revenues, in line with the comparable period in 2007.
Cost of sales was Ps. 5.425
billion in 4Q08, an increase of 13.5% compared with 4Q07, well ahead of the 8.6%
growth in total revenues. Cost per hectoliter increased by 14.4% as a result of
continuous cost pressure coming particularly from higher grain prices resulting
from hedging agreements, and the Mexican peso depreciation of 25% as applied to
our dollar-denominated costs. Gross profit increased 4.6% over 4Q07 to Ps. 6.067
billion in 4Q08, while gross margin declined by 200 basis points from 54.8% in
4Q07 to 52.8% in 4Q08.
For the
full year of 2008, cost of sales increased 9.6% to Ps. 19.540 billion. Gross
margin declined by 100 basis points to 53.9%.
Income from operations
decreased 9.3% compared to 4Q07 to Ps. 1,461 million in 4Q08, representing a
margin decline of 250 basis points, driven mainly by the increase in cost per
hectoliter. Cost pressure experienced during the quarter and an increase in
selling expenses more than offset the robust top-line growth and administrative
expense rationalization. Operating expenses increased 9.9% over 4Q07 to Ps.
4.606 billion, resulting from incremental selling expenses driven by (i) the
incremental volumes that we brought under our direct distribution network, (ii)
higher advertisement expense for our core export brands combined with the effect
of the peso depreciation versus the US dollar as applied to these expenses, and
(iii) continuous marketing investment behind our brands and at the point of sale
in Mexico. Approximately 60% of the incremental selling expenses are driven by
the first two items.
For the
full year of 2008, income from operations decreased 1.9% to Ps. 5.394 billion,
representing 12.7% of total revenues, or 120 basis points below 2007, reflecting
mainly the decline in gross margin.
February
26, 2009
4
FEMSA Comercio
Total revenues increased 11.1%
over 4Q07 to Ps. 12.206 billion in 4Q08 driven by the opening of 286 net new
stores in the quarter, for a total of 811 net new store openings in the year,
with stable same-store sales. As of December 31, 2008, there were a total of
6,374 stores in Mexico, exceeding the objective for the year. Same-store sales
were virtually flat, up an average of 0.1% for the quarter over 4Q07, driven by
a 12.1% increase in store traffic, which more than offset a 10.7% decline in the
average customer ticket. As was the case during the first nine months of 2008,
store ticket and traffic dynamics reflect the mix shift from prepaid wireless
phone cards to the sale of electronic air-time, for which only the margin is
recorded, not the full amount of the air-time recharge. On a comparable basis
excluding this change, the average ticket would have grown in the
mid-single-digits in 4Q08.
For the
full year of 2008, total revenues increased 12.0% to Ps. 47.146 billion. FEMSA
Comercio same-store sales increased an average of 0.4% driven by a 13.0%
increase in store traffic, which more than offset an 11.2% reduction in average
ticket.
Gross profit increased by
26.0% in 4Q08 compared to 4Q07, resulting in a 410 basis point gross margin
expansion reaching 34.4%. This increase largely reflects the shift towards
electronic air-time recharges as described above. The balance came from growth
in higher-margin categories such as cigarettes and ready-to-drink coffee, among
others, as well as better pricing strategies and improved commercial terms with
our supplier partners. For the full year of 2008, gross margin expanded by 290
basis points to 30.9%.
Income from operations increased 27.0% over
4Q07 to Ps. 1.139 billion in 4Q08. Operating expenses increased 25.6% to Ps.
3,060 million, mainly driven by incremental selling expenses such as higher
energy costs at the store level and expenses related to the strengthening of
FEMSA Comercio’s organizational structure, as planned. Operating margin expanded
110 basis points over 4Q07 reaching 9.3%, as the strong expansion of the gross
margin more than offset the increase in operating expenses.
For the
full year of 2008, income from operations increased 32.6% to Ps. 3.077 billion,
resulting in an all-time high operating margin of 6.5%, a 100 basis point
expansion as compared to the previous year.
February
26, 2009
5
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CONFERENCE
CALL INFORMATION:
Our
Fourth Quarter 2008 Conference Call will be held on: Thursday February 26,
2009, 11:00 AM Eastern Time (10:00 AM Mexico City Time). To participate in
the conference call, please dial: Domestic US: (1-888) 505-4328,
International: (1-719) 325-2388. The conference call will be webcast live
through streaming audio. For details please visit www.femsa.com/investor.
If
you are unable to participate live, the conference call replay will be
available through March 6, 2009; dialing Domestic US: (1-888) 203-1112,
International: (1-719) 457-0820 using passcode: 4465369. Additionally, the
conference call audio will be available on http://ir.femsa.com/results.cfm
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We are a
holding company whose principal activities are grouped under the following
sub-holding companies and carried out by their respective operating
subsidiaries: Coca-Cola FEMSA, S.A.B. de C.V., which engages in the production,
distribution and marketing of non-alcoholic beverages; FEMSA Cerveza, S.A. de
C.V., which engages in the production, distribution and marketing of beer and
flavored alcoholic beverages; and FEMSA Comercio, S.A. de C.V., which engages in
the operation of convenience stores.
The
translations of Mexican pesos into US dollars are included solely for the
convenience of the reader, using the noon day buying rate for pesos as published
by the Federal Reserve Bank of New York at December 31, 2008, which was 13.8320
Mexican pesos per US dollar.
FORWARD
LOOKING STATEMENTS
This
report may contain certain forward-looking statements concerning our future
performance that should be considered as good faith estimates made by us. These
forward-looking statements reflect management’s expectations and are based upon
currently available data. Actual results are subject to future events and
uncertainties, which could materially impact our actual
performance.
Six pages
of tables and Coca-Cola FEMSA’s press release to follow
February
26, 2009
6
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Consolidated Income
Statement
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Millions of
Pesos
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For the fourth quarter
of:
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For the twelve months
of:
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2008 (A)
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% of rev.
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2007 (B)
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% of rev.
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% Increase
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2008 (A)
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% of rev.
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2007 (B)
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% of rev.
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% Increase
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Total
revenues
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44,816 | 100.0 | 38,832 | 100.0 | 15.4 | 168,022 | 100.0 | 147,556 | 100.0 | 13.9 | ||||||||||||||||||||||||||||||
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Cost
of sales
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23,871 | 53.3 | 20,588 | 53.0 | 15.9 | 90,399 | 53.8 | 79,739 | 54.0 | 13.4 | ||||||||||||||||||||||||||||||
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Gross
profit
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20,945 | 46.7 | 18,244 | 47.0 | 14.8 | 77,623 | 46.2 | 67,817 | 46.0 | 14.5 | ||||||||||||||||||||||||||||||
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Administrative
expenses
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2,444 | 5.5 | 2,317 | 6.0 | 5.5 | 9,531 | 5.7 | 9,121 | 6.2 | 4.5 | ||||||||||||||||||||||||||||||
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Selling
expenses
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11,789 | 26.2 | 10,093 | 26.0 | 16.8 | 45,408 | 27.0 | 38,960 | 26.4 | 16.6 | ||||||||||||||||||||||||||||||
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Operating
expenses
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14,233 | 31.7 | 12,410 | 32.0 | 14.7 | 54,939 | 32.7 | 48,081 | 32.6 | 14.3 | ||||||||||||||||||||||||||||||
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Income from
operations
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6,712 | 15.0 | 5,834 | 15.0 | 15.0 | 22,684 | 13.5 | 19,736 | 13.4 | 14.9 | ||||||||||||||||||||||||||||||
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Other
expenses
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(792 | ) | (543 | ) | 45.9 | (2,374 | ) | (1,297 | ) | 83.0 | ||||||||||||||||||||||||||||||
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Interest
expense
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(1,276 | ) | (1,152 | ) | 10.8 | (4,930 | ) | (4,722 | ) | 4.4 | ||||||||||||||||||||||||||||||
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Interest
income
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95 | 194 | (51.0 | ) | 598 | 769 | (22.2 | ) | ||||||||||||||||||||||||||||||||
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Interest expense,
net
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(1,181 | ) | (958 | ) | 23.3 | (4,332 | ) | (3,953 | ) | 9.6 | ||||||||||||||||||||||||||||||
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Foreign exchange
(loss) gain
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(1,898 | ) | 209 |
N.S.
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(1,694 | ) | 691 |
N.S.
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(Loss) gain on monetary
position
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(35 | ) | 656 |
N.S.
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657 | 1,640 | (59.9 | ) | ||||||||||||||||||||||||||||||||
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Gain (Loss) on
financial instruments (C)
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(1,331 | ) | 70 |
N.S.
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(1,456 | ) | 69 |
N.S.
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Integral result of
financing
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(4,445 | ) | (23 | ) |
N.S.
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(6,825 | ) | (1,553 | ) |
N.S.
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||||||||||||||||||||||||||||||
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Income before income
tax
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1,475 | 5,268 | (72.0 | ) | 13,485 | 16,886 | (20.1 | ) | ||||||||||||||||||||||||||||||||
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Income tax
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(607 | ) | (1,661 | ) | (63.5 | ) | (4,207 | ) | (4,950 | ) | (15.0 | ) | ||||||||||||||||||||||||||||
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Net income
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868 | 3,607 | (75.9 | ) | 9,278 | 11,936 | (22.3 | ) | ||||||||||||||||||||||||||||||||
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Net majority
income
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586 | 2,640 | (77.8 | ) | 6,708 | 8,511 | (21.2 | ) | ||||||||||||||||||||||||||||||||
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Net minority
income
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282 | 967 | (70.8 | ) | 2,570 | 3,425 | (25.0 | ) | ||||||||||||||||||||||||||||||||
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(A)
Average Mexican Pesos of 2008.
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(B)
Constant Mexican Pesos as of Decmber 31, 2007
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(C)
Includes solely derivative instruments that do not meet hedging criteria
for accounting
purposes
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EBITDA &
CAPEX
|
||||||||||||||||||||||||||||||||||||||||
|
Income from
operations
|
6,712 | 15.0 | 5,834 | 15.0 | 15.0 | 22,684 | 13.5 | 19,736 | 13.4 | 14.9 | ||||||||||||||||||||||||||||||
|
Depreciation
|
1,386 | 3.1 | 1,104 | 2.8 | 25.5 | 4,967 | 3.0 | 4,359 | 3.0 | 13.9 | ||||||||||||||||||||||||||||||
|
Amortization &
other(5)
|
933 | 2.1 | 853 | 2.3 | 9.4 | 4,031 | 2.4 | 3,708 | 2.4 | 8.7 | ||||||||||||||||||||||||||||||
|
EBITDA
|
9,031 | 20.2 | 7,791 | 20.1 | 15.9 | 31,682 | 18.9 | 27,803 | 18.8 | 14.0 | ||||||||||||||||||||||||||||||
|
CAPEX
|
5,409 | 3,915 | 38.2 | 14,234 | 11,257 | 26.4 | ||||||||||||||||||||||||||||||||||
|
FINANCIAL
RATIOS
|
2008
|
2007
|
Var. p.p.
|
|||||||||
|
Liquidity(1)
|
0.89 | 1.00 | (0.11 | ) | ||||||||
|
Interest coverage(2)
|
7.65 | 8.13 | (0.49 | ) | ||||||||
|
Leverage(3)
|
0.91 | 0.85 | 0.06 | |||||||||
|
Capitalization(4)
|
33.49 | % | 33.27 | % | 0.22 | |||||||
|
(1) Total current assets / total
current liabilities.
|
|
(2) Income from operations +
depreciation + amortization & other / interest expense,
net.
|
|
(3) Total liabilities / total
stockholders' equity.
|
|
(4) Total debt / long-term debt +
stockholders' equity.
|
|
Total debt =
short-term bank loans + current maturities long-term debt + long-term bank
loans
|
|
and notes
payable.
|
|
(5) Includes returnable bottle
breakage expense.
|
February
26, 2009
7
|
FEMSA
|
||||||||||||
|
Consolidated Balance
Sheet
|
||||||||||||
|
As of December
31:
|
||||||||||||
|
ASSETS
|
2008 (A)
|
2007 (B)
|
% Increase
|
|||||||||
|
Cash and cash
equivalents
|
9,110 | 10,456 | (12.9 | ) | ||||||||
|
Accounts
receivable
|
10,759 | 9,329 | 15.3 | |||||||||
|
Inventories
|
13,065 | 10,037 | 30.2 | |||||||||
|
Prepaid expenses and
other
|
6,083 | 3,663 | 66.1 | |||||||||
|
Total current
assets
|
39,017 | 33,485 | 16.5 | |||||||||
|
Property, plant and equipment,
net
|
61,425 | 54,707 | 12.3 | |||||||||
|
Intangible assets(1)
|
65,299 | 60,234 | 8.4 | |||||||||
|
Other
assets
|
19,299 | 17,369 | 11.1 | |||||||||
|
TOTAL
ASSETS
|
185,040 | 165,795 | 11.6 | |||||||||
|
LIABILITIES & STOCKHOLDERS´
EQUITY
|
||||||||||||
|
Bank loans
|
5,799 | 3,447 | 68.2 | |||||||||
|
Current maturities long-term
debt
|
5,849 | 5,917 | (1.2 | ) | ||||||||
|
Interest
payable
|
376 | 475 | (20.8 | ) | ||||||||
|
Operating
liabilities
|
31,728 | 23,565 | 34.6 | |||||||||
|
Total current
liabilities
|
43,752 | 33,404 | 31.0 | |||||||||
|
Long-term debt (2)
|
31,275 | 30,664 | 2.0 | |||||||||
|
Labor
liabilities
|
2,886 | 3,718 | (22.4 | ) | ||||||||
|
Other
liabilities
|
10,232 | 8,356 | 22.5 | |||||||||
|
Total
liabilities
|
88,145 | 76,142 | 15.8 | |||||||||
|
Total stockholders’
equity
|
96,895 | 89,653 | 8.1 | |||||||||
|
LIABILITIES AND STOCKHOLDERS’
EQUITY
|
185,040 | 165,795 | 11.6 | |||||||||
|
(1) Includes mainly the intangible
assets generated by acquisitions.
|
|
(A)
Mexican Pesos for the end of 2008.
|
|
(B)
Constant Mexican Pesos as of Decmber 31, 2007
|
|
(2) Includes the effect of assigned
and non assigned derivative financial instruments on long-term debt, for
accountig
propuses
|
|
December
31, 2008
|
||||||||||||
|
DEBT
MIX
|
Ps.
|
%
Integration
|
Average
Rate
|
|||||||||
|
Denominated
in:
|
||||||||||||
|
Mexican
pesos
|
30,377 | 70.8 | % | 9.5 | % | |||||||
|
Dollars
|
9,681 | 22.6 | % | 5.4 | % | |||||||
|
Colombian
pesos
|
1,648 | 3.8 | % | 15.2 | % | |||||||
|
Argentinan
pesos
|
789 | 1.8 | % | 19.6 | % | |||||||
|
Venezuelan
bolivars
|
354 | 0.8 | % | 22.2 | % | |||||||
|
Brazilian
Reals
|
74 | 0.2 | % | 14.3 | % | |||||||
|
Total
debt
|
42,923 | 100.0 | % | 9.4 | % | |||||||
|
Fixed
rate(1)
|
23,613 | 55.0 | % | |||||||||
|
Variable
rate(1)
|
19,310 | 45.0 | % | |||||||||
|
%
of Total Debt
|
2009
|
2010
|
2011
|
2012
|
2013
|
2014
|
2015 | + | ||||||||||||||||||||
|
DEBT
MATURITY PROFILE
|
27.0 | % | 9.1 | % | 10.3 | % | 19.6 | % | 18.3 | % | 3.2 | % | 12.5 | % | ||||||||||||||
|
(1)
Includes the effect of interest rate
swaps.
|
February
26, 2009
8
|
Coca-Cola
FEMSA
|
||||||||||||||||||||||||||||||||||||||||
|
Results of
Operations
|
||||||||||||||||||||||||||||||||||||||||
|
Millions of
Pesos
|
||||||||||||||||||||||||||||||||||||||||
|
For the fourth quarter
of:
|
For the twelve months
of:
|
|||||||||||||||||||||||||||||||||||||||
|
2008 (A)
|
% of rev.
|
2007 (B)
|
% of rev.
|
%
Increase
|
2008 (A)
|
% of rev.
|
2007 (B)
|
% of rev.
|
%
Increase
|
|||||||||||||||||||||||||||||||
|
Total
revenues
|
22,752 | 100.0 | 18,361 | 100.0 | 23.9 | 82,976 | 100.0 | 69,251 | 100.0 | 19.8 | ||||||||||||||||||||||||||||||
|
Cost
of sales
|
12,292 | 54.0 | 9,350 | 50.9 | 31.5 | 43,895 | 52.9 | 35,876 | 51.8 | 22.4 | ||||||||||||||||||||||||||||||
|
Gross
profit
|
10,460 | 46.0 | 9,011 | 49.1 | 16.1 | 39,081 | 47.1 | 33,375 | 48.2 | 17.1 | ||||||||||||||||||||||||||||||
|
Administrative
expenses
|
1,007 | 4.4 | 998 | 5.4 | 0.9 | 4,094 | 4.9 | 3,728 | 5.4 | 9.8 | ||||||||||||||||||||||||||||||
|
Selling
expenses
|
5,400 | 23.8 | 4,789 | 26.1 | 12.8 | 21,292 | 25.7 | 18,161 | 26.2 | 17.2 | ||||||||||||||||||||||||||||||
|
Operating
expenses
|
6,407 | 28.2 | 5,787 | 31.5 | 10.7 | 25,386 | 30.6 | 21,889 | 31.6 | 16.0 | ||||||||||||||||||||||||||||||
|
Income
from operations
|
4,053 | 17.8 | 3,224 | 17.6 | 25.7 | 13,695 | 16.5 | 11,486 | 16.6 | 19.2 | ||||||||||||||||||||||||||||||
|
Depreciation
|
640 | 2.8 | 509 | 2.8 | 25.7 | 2,528 | 3.0 | 2,050 | 3.0 | 23.3 | ||||||||||||||||||||||||||||||
|
Amortization &
other
|
260 | 1.1 | 190 | 1.0 | 36.8 | 893 | 1.1 | 898 | 1.2 | (0.6 | ) | |||||||||||||||||||||||||||||
|
EBITDA
|
4,953 | 21.7 | 3,923 | 21.4 | 26.3 | 17,116 | 20.6 | 14,434 | 20.8 | 18.6 | ||||||||||||||||||||||||||||||
|
Capital
expenditures
|
1,938 | 0.0 | 1,297 | 0.0 | 49.4 | 4,802 | 0.0 | 3,682 | 0.0 | 30.4 | ||||||||||||||||||||||||||||||
|
(A)
Average Mexican Pesos of 2008.
|
|
(B)
Constant Mexican Pesos as of Decmber 31,
2007
|
|
Sales
volumes
|
||||||||||||||||||||||||||||||||||||||||
|
(Millions of unit
cases)
|
||||||||||||||||||||||||||||||||||||||||
|
Mexico
|
282.9 | 47.2 | 272.2 | 48.8 | 3.9 | 1,149.0 | 51.2 | 1,110.4 | 52.4 | 3.5 | ||||||||||||||||||||||||||||||
|
Latincentro
|
139.9 | 23.3 | 143.6 | 25.7 | (2.6 | ) | 537.2 | 24.0 | 534.9 | 25.2 | 0.4 | |||||||||||||||||||||||||||||
|
Mercosur
|
177.0 | 29.5 | 142.6 | 25.5 | 24.1 | 556.6 | 24.8 | 475.5 | 22.4 | 17.1 | ||||||||||||||||||||||||||||||
|
Total
|
599.8 | 100.0 | 558.4 | 100.0 | 7.4 | 2,242.8 | 100.0 | 2,120.8 | 100.0 | 5.8 | ||||||||||||||||||||||||||||||
February
26, 2009
9
|
FEMSA
Cerveza
|
||||||||||||||||||||||||||||||||||||||||
|
Results of
Operations
|
||||||||||||||||||||||||||||||||||||||||
|
Millions of
Pesos
|
||||||||||||||||||||||||||||||||||||||||
|
For
the fourth quarter of:
|
For
the twelve months of:
|
|||||||||||||||||||||||||||||||||||||||
|
2008 (A)
|
% of rev.
|
2007 (B)
|
% of rev.
|
%
Increase
|
2008 (A)
|
% of rev.
|
2007 (B)
|
% of rev.
|
%
Increase
|
|||||||||||||||||||||||||||||||
|
Sales:
|
||||||||||||||||||||||||||||||||||||||||
|
Mexico
|
7,808 | 67.9 | 7,147 | 67.6 | 9.2 | 29,224 | 68.9 | 27,215 | 68.8 | 7.4 | ||||||||||||||||||||||||||||||
|
Brazil
|
1,835 | 16.0 | 1,933 | 18.3 | (5.1 | ) | 6,182 | 14.6 | 5,903 | 14.9 | 4.7 | |||||||||||||||||||||||||||||
|
Export
|
942 | 8.2 | 719 | 6.7 | 31.0 | 3,608 | 8.5 | 3,339 | 8.4 | 8.1 | ||||||||||||||||||||||||||||||
|
Beer
sales
|
10,585 | 92.1 | 9,799 | 92.6 | 8.0 | 39,014 | 92.0 | 36,457 | 92.1 | 7.0 | ||||||||||||||||||||||||||||||
|
Other
revenues
|
907 | 7.9 | 779 | 7.4 | 16.4 | 3,371 | 8.0 | 3,109 | 7.9 | 8.4 | ||||||||||||||||||||||||||||||
|
Total
revenues
|
11,492 | 100.0 | 10,578 | 100.0 | 8.6 | 42,385 | 100.0 | 39,566 | 100.0 | 7.1 | ||||||||||||||||||||||||||||||
|
Cost
of sales
|
5,425 | 47.2 | 4,778 | 45.2 | 13.5 | 19,540 | 46.1 | 17,833 | 45.1 | 9.6 | ||||||||||||||||||||||||||||||
|
Gross
profit
|
6,067 | 52.8 | 5,800 | 54.8 | 4.6 | 22,845 | 53.9 | 21,733 | 54.9 | 5.1 | ||||||||||||||||||||||||||||||
|
Administrative
expenses
|
1,041 | 9.1 | 1,111 | 10.5 | (6.3 | ) | 4,093 | 9.7 | 4,295 | 10.9 | (4.7 | ) | ||||||||||||||||||||||||||||
|
Selling
expenses
|
3,565 | 31.0 | 3,079 | 29.1 | 15.8 | 13,358 | 31.5 | 11,941 | 30.1 | 11.9 | ||||||||||||||||||||||||||||||
|
Operating
expenses
|
4,606 | 40.1 | 4,190 | 39.6 | 9.9 | 17,451 | 41.2 | 16,236 | 41.0 | 7.5 | ||||||||||||||||||||||||||||||
|
Income
from operations
|
1,461 | 12.7 | 1,610 | 15.2 | (9.3 | ) | 5,394 | 12.7 | 5,497 | 13.9 | (1.9 | ) | ||||||||||||||||||||||||||||
|
Depreciation
|
448 | 3.9 | 377 | 3.6 | 18.8 | 1,714 | 4.0 | 1,614 | 4.1 | 6.2 | ||||||||||||||||||||||||||||||
|
Amortization &
other
|
635 | 5.5 | 526 | 5.0 | 20.7 | 2,539 | 6.1 | 2,320 | 5.8 | 9.4 | ||||||||||||||||||||||||||||||
|
EBITDA
|
2,544 | 22.1 | 2,513 | 23.8 | 1.2 | 9,647 | 22.8 | 9,431 | 23.8 | 2.3 | ||||||||||||||||||||||||||||||
|
Capital
expenditures
|
2,168 | 1,966 | 10.3 | 6,418 | 5,373 | 19.4 | ||||||||||||||||||||||||||||||||||
|
(A)
Average Mexican Pesos of 2008.
|
||||||||||||
|
(B)
Constant Mexican Pesos as of Decmber 31,
2007
|
|
Sales
volumes
|
||||||||||||||||||||||||||||||||||||||||
|
(Thousand
hectoliters)
|
||||||||||||||||||||||||||||||||||||||||
|
Mexico
|
7,118.1 | 64.6 | 7,169.4 | 64.6 | (0.7 | ) | 27,392.9 | 66.7 | 26,961.8 | 67.5 | 1.6 | |||||||||||||||||||||||||||||
|
Brazil
|
3,145.9 | 28.6 | 3,259.1 | 29.4 | (3.5 | ) | 10,180.8 | 24.8 | 9,794.8 | 24.5 | 3.9 | |||||||||||||||||||||||||||||
|
Exports
|
752.4 | 6.8 | 670.3 | 6.0 | 12.3 | 3,479.4 | 8.5 | 3,183.2 | 8.0 | 9.3 | ||||||||||||||||||||||||||||||
|
Total
|
11,016.4 | 100.0 | 11,098.8 | 100.0 | (0.7 | ) | 41,053.1 | 100.0 | 39,939.8 | 100.0 | 2.8 | |||||||||||||||||||||||||||||
|
Price per
hectoliter
|
||||||||||||||||||||||||||||||||||||||||
|
Mexico
|
1,096.9 | 996.9 | 10.0 | 1,066.8 | 1,009.4 | 5.7 | ||||||||||||||||||||||||||||||||||
|
Brazil
|
583.3 | 593.1 | (1.7 | ) | 607.2 | 602.7 | 0.8 | |||||||||||||||||||||||||||||||||
|
Exports
|
1,251.9 | 1,072.7 | 16.7 | 1,037.0 | 1,048.9 | (1.1 | ) | |||||||||||||||||||||||||||||||||
|
Total
|
960.8 | 882.9 | 8.8 | 950.3 | 912.8 | 4.1 | ||||||||||||||||||||||||||||||||||
|
Price per hectoliter (Local
currency)
|
||||||||||||||||||||||||||||||||||||||||
|
Brazil
(Real)
|
102.4 | 96.8 | 5.8 | 100.2 | 98.2 | 2.0 | ||||||||||||||||||||||||||||||||||
|
Exports
(USD)
|
96.5 | 98.3 | (1.8 | ) | 94.0 | 93.8 | 0.2 | |||||||||||||||||||||||||||||||||
February
26, 2009
10
|
Results of
Operations
|
|
Millions of
Pesos
|
|
For
the fourth quarter of:
|
For
the twelve months of:
|
|||||||||||||||||||||||||||||||||||||||
|
2008 (A)
|
% of rev.
|
2007 (B)
|
% of rev.
|
%
Increase
|
2008 (A)
|
% of rev.
|
2007 (B)
|
% of rev.
|
%
Increase
|
|||||||||||||||||||||||||||||||
|
Total
revenues
|
12,206 | 100.0 | 10,982 | 100.0 | 11.1 | 47,146 | 100.0 | 42,103 | 100.0 | 12.0 | ||||||||||||||||||||||||||||||
|
Cost
of sales
|
8,007 | 65.6 | 7,649 | 69.7 | 4.7 | 32,565 | 69.1 | 30,301 | 72.0 | 7.5 | ||||||||||||||||||||||||||||||
|
Gross
profit
|
4,199 | 34.4 | 3,333 | 30.3 | 26.0 | 14,581 | 30.9 | 11,802 | 28.0 | 23.5 | ||||||||||||||||||||||||||||||
|
Administrative
expenses
|
216 | 1.8 | 196 | 1.8 | 10.2 | 833 | 1.8 | 751 | 1.8 | 10.9 | ||||||||||||||||||||||||||||||
|
Selling
expenses
|
2,844 | 23.3 | 2,240 | 20.3 | 27.0 | 10,671 | 22.6 | 8,731 | 20.7 | 22.2 | ||||||||||||||||||||||||||||||
|
Operating
expenses
|
3,060 | 25.1 | 2,436 | 22.1 | 25.6 | 11,504 | 24.4 | 9,482 | 22.5 | 21.3 | ||||||||||||||||||||||||||||||
|
Income
from operations
|
1,139 | 9.3 | 897 | 8.2 | 27.0 | 3,077 | 6.5 | 2,320 | 5.5 | 32.6 | ||||||||||||||||||||||||||||||
|
Depreciation
|
176 | 1.4 | 145 | 1.3 | 21.4 | 663 | 1.4 | 543 | 1.3 | 22.1 | ||||||||||||||||||||||||||||||
|
Amortization &
other
|
133 | 1.2 | 106 | 1.0 | 25.5 | 468 | 1.0 | 422 | 1.0 | 10.9 | ||||||||||||||||||||||||||||||
|
EBITDA
|
1,448 | 11.9 | 1,148 | 10.5 | 26.1 | 4,208 | 8.9 | 3,285 | 7.8 | 28.1 | ||||||||||||||||||||||||||||||
|
Capital
expenditures
|
957 | 725 | 32.0 | 2,720 | 2,112 | 28.8 | ||||||||||||||||||||||||||||||||||
|
(A)
Average Mexican Pesos of 2008.
|
||||||||||||
|
(B)
Constant Mexican Pesos as of Decmber 31,
2007
|
|
Information of Convenience
Stores
|
||||||||||||||||||||||||
|
Total
stores
|
6,374 | 5,563 | 14.6 | |||||||||||||||||||||
|
Net
new stores
|
286 | 326 | (12.3 | ) | 811 | 716 | 13.3 | |||||||||||||||||
|
Same store data: (1)
|
||||||||||||||||||||||||
|
Sales
(thousands of pesos)
|
627.6 | 626.8 | 0.1 | 637.1 | 634.3 | 0.4 | ||||||||||||||||||
|
Traffic
|
24.1 | 21.5 | 12.1 | 24.4 | 21.6 | 13.0 | ||||||||||||||||||
|
Ticket
|
26.0 | 29.1 | (10.7 | ) | 26.1 | 29.4 | (11.2 | ) | ||||||||||||||||
|
(1)
Monthly average information per store, considering same stores with at
least 13 months of
operations.
|
February
26, 2009
11
|
Macroeconomic
Information
|
||||||
|
Exchange
Rate
|
||||||||||||||||||||||||
|
Inflation
|
as
of December 31, 2008
|
as
of December 31, 2007
|
||||||||||||||||||||||
|
December
07 -
|
||||||||||||||||||||||||
| 4Q 2008 |
December
08
|
Per
USD
|
Per
Mx. Peso
|
Per
USD
|
Per
Mx. Peso
|
|||||||||||||||||||
|
Mexico
|
2.53 | % | 6.52 | % | 13.54 | 1.0000 | 10.87 | 1.0000 | ||||||||||||||||
|
Colombia
|
1.07 | % | 7.67 | % | 2,243.59 | 0.0060 | 2,014.76 | 0.0054 | ||||||||||||||||
|
Venezuela
|
7.48 | % | 30.90 | % | 2.15 | 6.2969 | 2,150.00 | 0.0051 | ||||||||||||||||
|
Brazil
|
1.17 | % | 6.48 | % | 2.34 | 5.7929 | 1.77 | 6.1355 | ||||||||||||||||
|
Argentina
|
1.11 | % | 7.24 | % | 3.45 | 3.9207 | 3.15 | 3.4506 | ||||||||||||||||
February
26, 2009
12
2008 FOURTH-QUARTER AND
FULL YEAR RESULTS
|
Fourth
Quarter
|
YTD
|
|||||||||||||||||||||||
|
2008
|
2007
|
Δ%
|
2008
|
2007
|
Δ%
|
|||||||||||||||||||
|
Total
Revenues
|
22,752 | 18,361 | 23.9 | % | 82,976 | 69,251 | 19.8 | % | ||||||||||||||||
|
Gross
Profit
|
10,460 | 9,011 | 16.1 | % | 39,081 | 33,375 | 17.1 | % | ||||||||||||||||
|
Operating
Income
|
4,053 | 3,224 | 25.7 | % | 13,695 | 11,486 | 19.2 | % | ||||||||||||||||
|
Majority
Net Income
|
585 | 1,932 | -69.7 | % | 5,598 | 6,908 | -19.0 | % | ||||||||||||||||
|
EBITDA(1)
|
4,953 | 3,923 | 26.3 | % | 17,116 | 14,434 | 18.6 | % | ||||||||||||||||
|
Net
Debt (2)
|
12,382 | 11,374 | 8.9 | % | ||||||||||||||||||||
|
(3)
EBITDA/ Interest Expense, net
|
9.65 | 9.22 | ||||||||||||||||||||||
|
(3)
EBITDA/ Interest Expense
|
7.76 | 6.63 | ||||||||||||||||||||||
|
Earnings
per Share
|
0.32 | 1.05 | 3.03 | 3.74 | ||||||||||||||||||||
|
Capitalization(4)
|
26.5 | % | 29.2 | % | ||||||||||||||||||||
 |
Expressed
in million of Mexican pesos. Figures of 2007 are expresed with purchasing
power as of December 31, 2007
(1) EBITDA = Operating income
+ Depreciation + Amortization & Other operative Non-cash
Charges.
See
reconciliation table on page 10 except for Earnings per
Share
(2) Net Debt = Total Debt -
Cash
(3) LTM
figures
(4) Total debt / (long-term
debt + stockholders' equity)
·
Total
revenues reached Ps. 22,752 million in the fourth quarter of 2008, an
increase of 23.9% compared to the fourth quarter of 2007; the acquisition
of Refrigerantes Minas Gerais (“Remil”) contributed approximately 35% of
this growth.
·
Consolidated
operating income grew 25.7% to Ps. 4,053 million for the fourth quarter of
2008 mainly driven by double-digit operating income growth recorded in our
Mercosur and Latincentro divisions. Our operating margin reached 17.8% for
the fourth quarter of 2008.
·
Consolidated
majority net income decreased 69.7% to Ps. 585 million in the fourth
quarter of 2008, mainly reflecting the devaluation of the Mexican peso as
applied to our U.S. dollar-denominated debt, resulting in earnings per
share of Ps. 0.32 in the fourth quarter of 2008.
Mexico
City (February 25, 2009), Coca-Cola FEMSA, S.A.B. de C.V. (BMV: KOFL,
NYSE: KOF) (“Coca-Cola FEMSA” or the “Company”), the largest Coca-Cola
bottler in Latin America and the second-largest Coca-Cola bottler in the
world in terms of sales volume, announces results for the fourth quarter
of 2008.
"Despite
of facing a challenging economic environment and pressures in our U.S.
dollar-denominated raw material cost, our company delivered solid volume,
revenue, and EBITDA growth for the quarter. Revenue-management and
multi-segmentation strategies across our territories, combined with the
acquisitions we made during the year, drove our operations’ top-and
bottom-line growth. The successful integration of the Remil franchise
territory in Brazil, the acquisition of the Agua de los Angeles jug water
business in the Valley of Mexico and the consolidation of the Jugos del
Valle line of business, specially in Mexico and Colombia, provided new
avenues of growth for the company. This year, turbulent market and
economic conditions present our company with the challenge of continuing
to work relentlessly-without losing our focus-to achieve our goals. Our
business is in a significantly better position to capture the
opportunities that lie ahead in the beverage industry." said Carlos
Salazar Lomelin, Chief Executive Officer of the Company.
|
|
|
February
25, 2009
|
 |
Page
13
|
CONSOLIDATED FOURTH QUARTER 2008
RESULTS
Until December 31, 2007, we applied
inflationary accounting for all of our operations. Beginning January 1, 2008, in
accordance with changes in the Mexican Financial Reporting Standards related to
inflation effects, we discontinued inflation accounting for our subsidiaries in
Mexico, Guatemala, Panama, Colombia and Brazil. For the rest of our subsidiaries
(Argentina, Venezuela, Costa Rica and Nicaragua) we will continue applying the
inflationary accounting method. The figures for 2007 are stated in Mexican pesos
with purchasing power at December 31, 2007 (instead of being restated as of
December 31, 2008 as would have been the case under the previous methodology)
taking into account local inflation of each country with reference to the
consumer price index and converted from local currency to Mexican pesos using
the official exchange rate of December 31, 2007 published by the local central
bank of each country.
Beginning with the first quarter of
2008, we decided to align our quarterly disclosure based on the way we manage
the business. We have regrouped our operations into three divisions: (i) Mexico
division, (ii) Latincentro division, which is comprised of the territories we
operate in Colombia, Venezuela, Guatemala, Nicaragua, Costa Rica and Panama, and
(iii) Mercosur division, which is comprised of the territories we operate in
Brazil and Argentina.
Our consolidated total revenues
increased 23.9% to Ps. 22,752 million in the fourth quarter of 2008, compared to
the fourth quarter of 2007, as a result of increases in all of our divisions.
Pricing and volume growth accounted for more than 40% of incremental revenues.
The consolidation of Refrigerantes Minas Gerais, Ltda. (“Remil”) in Brazil
contributed approximately 35% of incremental revenues for the quarter and a
positive exchange rate translation effect provided the
balance.
Total sales volume increased 7.4% to
599.8 million unit cases in the fourth quarter of 2008 as compared to the same
period of 2007; excluding Remil, total sales volume increased 1.8% mainly driven
by incremental volumes from brand Coca-Cola, our bottled water business and still
beverages. Still beverages sales volume grew more than 120%, mainly driven by
volumes from the Jugos del
Valle brand in our Mexico
division, accounting for more than 80% of incremental volumes in this category.
Bottled water, including bulk water, represented the balance growing more than
6%, mainly driven by the consolidation of the Agua de Los Angeles business in
Mexico.
Our gross profit increased 16.1% to Ps.
10,460 million in the fourth quarter of 2008, compared to the fourth quarter of
2007. Cost of goods sold increased 31.5% mainly driven by (i) the devaluation of
the local currencies in our main operations as applied to our U.S.
dollar-denominated raw material cost; (ii) higher year-over-year sweetener costs
outside of our Mexico division; and (iii) lower profitability from the Jugos del
Valle line of business, as expected this year in Mexico. Gross margin reached
46.0% in the fourth quarter of 2008 as compared to 49.1% in the same period of
2007.
Our consolidated operating income
increased 25.7% to Ps. 4,053 million in the fourth quarter of 2008, mainly
driven by double-digit operating income growth in our Latincentro and Mercosur
divisions. Our operating margin was 17.8% in the fourth quarter of 2008, an
increase of 20 basis points. Revenue growth, lower administrative and marketing
expenses and operating leverage more than compensated for higher cost of goods
sold.
During the fourth quarter of 2008, we
recorded Ps. 426 million in the other expenses line. These expenses were mainly driven
by (i) the write off of some fixed assets related to the closing of one of our
production facilities in Mexico, in addition to the one previously mentioned in
the third quarter press release, (ii) the loss on sale of some fixed assets and
(iii) employee profit sharing recorded in the other expenses line, in accordance with the Mexican
Financial Reporting Standards.
Our integral result of financing in the
fourth quarter of 2008 recorded an expense of Ps. 2,823 million as compared to
Ps. (162) million in the same period of 2007, mainly due to a higher foreign
exchange expense driven by the devaluation of the Mexican peso as applied to our
U.S. dollar-denominated debt.
During the fourth quarter of 2008,
income tax, as a percentage of income before taxes, was 17.8% as a result of the
cancellation of an allowance recorded in previous periods, related to tax
credits in some of our operations.
Our consolidated majority net income
decreased by 69.7% to Ps. 585 million in the fourth quarter of 2008 as compared
to the fourth quarter of 2007, mainly reflecting the devaluation of the Mexican
peso as applied to our U.S. dollar-denominated debt. Earnings per share (EPS)
were Ps. 0.32 (Ps 3.17 per ADR) computed on the basis of 1,846.5 million shares
outstanding (each ADR represents 10 local shares).
|
February
25, 2009
|
|
Page
14
|
BALANCE SHEET
As of December 31, 2008, Coca-Cola FEMSA
had a cash balance of Ps. 6,192 million including US$ 209 million in US
dollar-currency, a decrease of Ps. 1,350 million compared to December 31, 2007,
mainly as a result of cash used in the acquisitions of Remil and Agua de los
Angeles.
Total short-term debt was Ps. 6,119
million and long-term debt was Ps. 12,455 million. Total debt decreased Ps. 342
million compared with year end 2007 mainly as a result of the maturities of our
“Certificados Bursátiles” in April and July 2008. Net debt increased
approximately Ps. 1,008 million compared to year end 2007, mainly as a result of
cash used in the Remil and Agua de Los Angeles acquisition. KOF’s total debt
balance includes U.S. dollar-denominated debt in the amount of US$ 712 million
(1).
The weighted average cost of debt for
the quarter was 7.75%. The following charts set forth the Company’s debt profile
by currency and interest rate type and by maturity date as of December 31,
2008:
|
Currency
|
% Total
Debt(1)
|
% Interest Rate
Floating(1)(2)
|
||||||
|
Mexican
pesos
|
34.6 | % | 79.8 | % | ||||
|
U.S.
dollars
|
50.3 | % | 64.6 | % | ||||
|
Colombian
pesos
|
8.9 | % | 100.0 | % | ||||
|
Venezuelan
bolivars
|
1.9 | % | 0.0 | % | ||||
|
Argentine
pesos
|
4.3 | % | 47.5 | % | ||||
|
|
(1)
|
After giving effect to
cross-currency swaps and interest rate
swaps.
|
|
|
(2)
|
Calculated by weighting each
year’s outstanding debt balance
mix.
|
Debt Maturity
Profile
|
Maturity
Date
|
2009
|
2010
|
2011
|
2012
|
2013
|
2014 +
|
|
% of Total
Debt
|
32.8%
|
10.3%
|
0.0%
|
21.3%
|
12.8/%
|
22.8%
|
As of February 24, 2009 our cash balance
was the equivalent of US$ 651 million including US$ 360 million in US
dollar-currency and the proceeds of the bond offering made on January 28, 2009.
These funds, in addition to the cash generation during the year, are sufficient
to meet our maturities coming due in July of 2009, as well as other operating
needs.
The difference between the reduction in
debt of the balance sheet and the debt decrease in nominal terms presented in
the cash flow is related to the foreign exchange impact, presented separately
as translation effect,
in accordance with the
Mexican Financial Reporting Standards related to cash flow.
|
February
25, 2009
|
|
Page
15
|
MEXICO DIVISION OPERATING
RESULTS
In November 2007, Coca-Cola FEMSA
together with The Coca-Cola Company acquired 100% of Jugos del Valle, S.A.B. de
C.V. As of February 2008, we and the rest of the Coca-Cola bottlers are
distributing the Jugos del Valle portfolio in our respective territories through
the traditional channel. Volume, average price per unit case, cost of goods sold
and operating expenses related to these products are recorded in our
consolidated and Mexico division operating results.
Revenues
Total revenues from our Mexico division
increased 4.5% to Ps. 8,450 million in the fourth quarter of 2008, as compared
to the same period of the previous year. Incremental volumes accounted for the
majority of incremental revenues during the quarter. Average price per unit case
increased to Ps. 29.73, a 0.5% increase, as compared to the fourth quarter of
2007, reflecting higher average prices per unit case from our growing still
beverage portfolio that were partially offset by lower average prices per unit
case in sparkling flavors and higher volumes of brand Coca-Cola in multiserve presentations. Excluding
bulk water under the brands Ciel and Agua de los
Angeles, our average price
per unit case was Ps. 34.75, a 1.7% increase as compared to the same period of
2007.
Total sales volume increased 3.9% to
282.9 million unit cases in the fourth quarter of 2008, as compared to the
fourth quarter of 2007, resulting from incremental volumes in the still beverage
category, increasing almost four times, driven by the Jugos del Valle product
line and more than 8% volume growth in our bottled water business which more
than compensated for a sales volume decline of 1.6% in sparkling beverages,
which decline was driven mainly by flavored sparkling
beverages.
Operating Income
Our gross profit decreased 1.6% to Ps.
4,287 million in the fourth quarter of 2008 as compared to the same period of
2007. Cost of goods sold increased 11.5% as a result of (i) lower profitability
from the Jugos del Valle line of business, as expected this year, (ii) the
devaluation of the Mexican peso as applied to our U.S. dollar-denominated raw
material cost and (iii) the second stage of the concentrate increase, that
offset lower year-over-year cost of sweeteners and resin. Gross margin decreased
from 53.8% in the fourth quarter of 2007 to 50.7% in the same period of
2008.
Operating income increased 7.0% to Ps.
1,840 million in the fourth quarter of 2008, compared to Ps. 1,719 million in
the same period of 2007, as a result of revenue growth and lower selling
expenses, which more than compensated for higher cost of goods sold. Our
operating margin was 21.8% in the fourth quarter of 2008, an increase of 50
basis points as compared to the same period of 2007.
|
February
25, 2009
|
|
Page
16
|
LATINCENTRO DIVISION OPERATING RESULTS
(Colombia, Venezuela, Guatemala, Nicaragua, Costa Rica and
Panama)
During this quarter Coca-Cola FEMSA
continued to distribute Jugos del Valle in Colombia, Costa Rica, Panama and
Nicaragua. Volume, average price per unit case, cost of goods sold and operating
expenses related to these products are recorded in our consolidated and
Latincentro division operating results.
Revenues
Total revenues reached Ps. 7,557 million
in the fourth quarter of 2008, an increase of 34.1% as compared to the same
period of 2007. Higher average price per unit case accounted for more than 40%
of incremental revenues and a positive translation effect represented the
balance. Excluding this translation effect, our Latincentro division revenues
would have increased 14.1%.
Total sales volume in our Latincentro
division decreased 2.6% to 139.9 million unit cases in the fourth quarter of
2008, as compared to the same period of 2007. Volume decline was mainly driven
by a decrease in volumes in Venezuela due to operating disruptions in the month
of December, that was partially offset by volume increases from sparkling
beverages in Colombia and incremental volumes from the Jugos del Valle line of
business in Colombia and Central America.
Operating Income
Gross profit reached Ps. 3,120 million,
an increase of 23.2% in the fourth quarter of 2008, as compared to the same
period of 2007, Cost of goods sold increased 42.9% mainly driven by the
depreciation of the Colombian peso as applied to our U.S. dollar-denominated
packaging costs and higher sweetener costs across the division. Gross margin
decreased from 44.9% in the fourth quarter of 2007 to 41.3% in the same period
of 2008, a decrease of 360 basis points.
Our operating income increased 43.1% to
Ps. 983 million in the fourth quarter of 2008, compared to the fourth quarter of
2007, as a result of operating leverage achieved by higher revenues combined
with lower marketing expenses in Colombia and Central America, which more than
compensated for higher labor costs in Venezuela. Our operating margin reached
13.0% in the fourth quarter of 2008, resulting in an 80 basis points expansion
as compared to the same period of 2007.
|
February
25, 2009
|
|
Page
17
|
MERCOSUR DIVISION OPERATING RESULTS
(Brazil and Argentina)
As of June 2008, Coca-Cola FEMSA is
including the Remil operations in its Mercosur division. Volume and average
price per unit case exclude beer results.
Revenues
Net revenues increased 44.7% to Ps.
6,634 million in the fourth quarter of 2008, as compared to the same period of
2007. Excluding beer, which accounted for Ps. 646 million during the quarter,
net revenues increased 44.1% to Ps. 5,988 million, compared to the same period
of 2007. The acquisition of Remil accounted for more than 70% of this growth and
higher average prices per unit case and volume growth accounted for the balance.
Excluding a negative impact from currency translation, our Mercosur division
revenues would have increased 48.0%
Sales volume, excluding beer, increased
24.1% to 177.0 million unit cases in the fourth quarter of 2008, as compared to
the fourth quarter of 2007, mainly driven by the acquisition of Remil. Sales
volume, excluding Remil and beer, increased 2.2% to reach 145.7 million unit
cases. Sparkling beverages volume growth accounted for almost 50% of these
incremental volumes, mainly driven by brand
Coca-Cola; bottled water in
Brazil and still beverages in Argentina provided the
balance.
Operating Income
In the fourth quarter of 2008, our gross
profit increased 43.7% to Ps. 3,053 million, as compared to the same period of
the previous year. Cost of goods sold increased 47.0% driven by the devaluation
of the local currencies as applied to our U.S. dollar-denominated raw material
cost combined with higher sweetener cost in Brazil, as compared to the same
period of last year. Our Mercosur division gross margin decreased 50 basis
points to 45.3% in the fourth quarter of 2008.
Operating income increased 50.4%,
reaching Ps. 1,230 million in the fourth quarter of 2008, as compared to Ps. 818
million in the same period of 2007. Operating leverage achieved by higher
revenues more than compensated for (i) higher expenses related to expansion in
our cooler coverage, (ii) the renewal of our distribution fleet in Brazil and
(iii) higher labor and freight costs in Argentina. Our operating margin was
18.2% in the fourth quarter of 2008, an increase of 60 basis points as compared
to the fourth quarter of 2007.
|
February
25, 2009
|
|
Page
18
|
SUMMARY OF FULL YEAR
RESULTS
Our consolidated total revenues
increased 19.8% to Ps. 82,976 million in 2008, as compared to 2007, as a result
of growth in all of our divisions. The Latincentro division accounted for more
than 45% of the growth, the acquisition of Remil contributed more than 20% of
incremental revenues; Mexico and the Mercosur division, excluding Remil,
represented the balance.
Total sales volume increased 5.8% to
2,242.8 million unit cases in 2008, as compared to the previous year. Excluding
Remil, total sales volume increased 2.6% to reach 2,176.7 million unit cases;
sparkling beverage sales accounted for close to 20% of these incremental volumes
and our water business and still beverages represented the
balance.
Our gross profit increased 17.1% to Ps.
39,081 million in 2008, as compared to the previous year, driven by gross profit
growth across all of our divisions. Cost of goods sold increased 22.4%
as a result of cost pressures
related to the devaluation of local currencies in our main operations as applied
to our U.S. dollar-denominated raw material costs and lower profitability from
the Jugos del Valle line of business in Mexico, as expected this year. Gross
margin reached 47.1% during 2008, a decrease of 110 basis points as compared to
the same period of 2007.
Our consolidated operating income
increased 19.2% to Ps. 13,695 million in 2008, as compared to 2007. Our Mercosur
and Latincentro divisions accounted for close to 90% of this growth. Our
operating margin remained almost flat at 16.5% in 2008.
Our consolidated majority net income was
Ps. 5,598 million in 2008, a decrease of 19.0% compared to 2007, mainly
reflecting the depreciation of the Mexican peso as applied to our U.S.
dollar-denominated debt. EPS was Ps. 3.03 (Ps. 30.32 per ADR) in 2008, computed
on the basis of 1,846.5 million shares outstanding (each ADR represents 10 local
shares).
|
February
25, 2009
|
|
Page
19
|
RECENT
DEVELOPEMENTS
|
|
·
|
On January 29, 2009, Coca-Cola
FEMSA successfully issued Ps. 2,000 million in 1.1 year “Certificados
Bursátiles” at a yield of 28-day TIIE plus 80 basis points. The proceeds
from this issuance were used to bolster existing cash reserves and
complement expected free cash
flow.
|
|
|
·
|
On February 6, 2009 – Coca-Cola
FEMSA and The Coca-Cola Company received an approval from the Colombian
anti-trust authorities to jointly acquire the Brisa bottled water business
(including the Brisa brand and production assets) from
Bavaria, a subsidiary of SABMiller. This transaction, which we expect to
close soon, will enable us to increase our presence in the water business
and complement our portfolio. Brisa sold 47 million unit cases in 2008 in
Colombia.
|
CONFERENCE CALL
INFORMATION
Our fourth-quarter 2008 Conference Call
will be held on: February 25, 2009, at 11:00 A.M. Eastern Time (10:00 A.M.
Mexico City Time). To participate in the conference call, please dial: Domestic
U.S.: 866-700-7477 or International: 617-213-8840. We invite investors to listen
to the live audiocast of the conference call on the Company’s website,
www.coca-colafemsa.com
If you are unable to participate live,
an instant replay of the conference call will be available through March 03,
2009. To listen to the replay, please dial: Domestic U.S.: 888-286-8010 or
International: 617-801-6888. Pass code: 69810319.
v v v
Coca-Cola FEMSA, S.A.B. de C.V. produces
and distributes Coca-Cola, Sprite,
Fanta, Lift and other
trademark beverages of The Coca-Cola Company in Mexico (a substantial part of central
Mexico, including Mexico City and southeast Mexico), Guatemala (Guatemala City
and surrounding areas), Nicaragua (nationwide), Costa Rica (nationwide), Panama
(nationwide), Colombia (most of the country), Venezuela (nationwide), Brazil
(greater São Paulo, Campiñas, Santos, the state of Mato Grosso do Sul, part of
the state of Goias and Minas Gerais) and Argentina (federal capital of Buenos
Aires and surrounding areas), along with bottled water, beer and other beverages
in some of these territories. The Company has 31 bottling facilities in Latin
America and serves over 1,600,000 retailers in the region. The Coca-Cola Company
owns a 31.6% equity interest in Coca-Cola FEMSA.
v v v
This news release may contain
forward-looking statements concerning Coca-Cola FEMSA’s future performance and
should be considered as good faith estimates by Coca-Cola FEMSA. These
forward-looking statements reflect management’s expectations and are based upon
currently available data. Actual results are subject to future events and
uncertainties, many of which are outside Coca-Cola FEMSA’s control that could
materially impact the Company’s actual performance.
References herein to “US$” are to United
States dollars. This news release contains translations of certain Mexican peso
amounts into U.S. dollars for the convenience of the reader. These translations
should not be construed as representations that Mexican peso amounts actually
represent such U.S. dollar amounts or could be converted into U.S. dollars at
the rate indicated.
U.S. dollar amounts in this report,
solely for the convenience of the reader, have been translated from Mexican
pesos at the noon day buying rate for pesos as published by the Federal Reserve
Bank of New York at December 31, 2008, which exchange rate was Ps. 13.8320 to
US$ 1.00. The exchange rate considered to translate Mexican Pesos into U.S.
dollars at February 24, 2009 was Ps. 14.8230 to US$ 1.00.
v v v
(6 pages of tables to
follow)
|
February
25, 2009
|
|
Page
20
|
|
Consolidated Income
Statement
|
|
Expressed in million of Mexican
pesos(1), figures of 2007 are expresed with
purchasing power as of December 31,
2007
|
| 4Q 08 |
% Rev
|
4Q 07 |
% Rev
|
Δ%
|
YTD 08
|
% Rev
|
YTD 07
|
% Rev
|
Δ%
|
|||||||||||||||||||||||||||||||
|
Volume (million unit cases)
(2)
|
599.8 | 558.4 | 7.4 | % | 2,242.8 | 2,120.8 | 5.8 | % | ||||||||||||||||||||||||||||||||
|
Average price per unit case
(2)
|
36.59 | 31.94 | 14.6 | % | 35.93 | 31.95 | 12.5 | % | ||||||||||||||||||||||||||||||||
|
Net
revenues
|
22,597 | 18,263 | 23.7 | % | 82,468 | 68,969 | 19.6 | % | ||||||||||||||||||||||||||||||||
|
Other operating revenues
(5)
|
155 | 98 | 58.2 | % | 508 | 282 | 80.1 | % | ||||||||||||||||||||||||||||||||
|
Total
revenues
|
22,752 | 100 | % | 18,361 | 100 | % | 23.9 | % | 82,976 | 100 | % | 69,251 | 100 | % | 19.8 | % | ||||||||||||||||||||||||
|
Cost of
sales
|
12,292 | 54.0 | % | 9,350 | 50.9 | % | 31.5 | % | 43,895 | 52.9 | % | 35,876 | 51.8 | % | 22.4 | % | ||||||||||||||||||||||||
|
Gross
profit
|
10,460 | 46.0 | % | 9,011 | 49.1 | % | 16.1 | % | 39,081 | 47.1 | % | 33,375 | 48.2 | % | 17.1 | % | ||||||||||||||||||||||||
|
Operating
expenses
|
6,407 | 28.2 | % | 5,787 | 31.5 | % | 10.7 | % | 25,386 | 30.6 | % | 21,889 | 31.6 | % | 16.0 | % | ||||||||||||||||||||||||
|
Operating
income
|
4,053 | 17.8 | % | 3,224 | 17.6 | % | 25.7 | % | 13,695 | 16.5 | % | 11,486 | 16.6 | % | 19.2 | % | ||||||||||||||||||||||||
|
Other expenses,
net
|
426 | 178 | 139.3 | % | 1,831 | 701 | 161.2 | % | ||||||||||||||||||||||||||||||||
|
Interest
expense
|
515 | 485 | 6.2 | % | 2,207 | 2,178 | 1.3 | % | ||||||||||||||||||||||||||||||||
|
Interest
income
|
65 | 152 | -57.2 | % | 433 | 613 | -29.4 | % | ||||||||||||||||||||||||||||||||
|
Interest expense,
net
|
450 | 333 | 35.1 | % | 1,774 | 1,565 | 13.4 | % | ||||||||||||||||||||||||||||||||
|
Foreign exchange loss
(gain)
|
1,501 | (27 | ) | -5659.3 | % | 1,477 | (99 | ) | -1591.9 | % | ||||||||||||||||||||||||||||||
|
(Gain) on monetary position in
Inflationary subsidiries
|
36 | (423 | ) | -108.5 | % | (658 | ) | (1,006 | ) | -34.6 | % | |||||||||||||||||||||||||||||
|
Market value loss (gain) on
inefective derivative instruments
|
836 | (45 | ) | -1957.8 | % | 959 | (114 | ) | -941.2 | % | ||||||||||||||||||||||||||||||
|
Integral result of
financing
|
2,823 | (162 | ) | -1842.6 | % | 3,552 | 346 | 926.6 | % | |||||||||||||||||||||||||||||||
|
Income before
taxes
|
804 | 3,208 | -74.9 | % | 8,312 | 10,439 | -20.4 | % | ||||||||||||||||||||||||||||||||
|
Taxes
|
143 | 1,228 | -88.4 | % | 2,486 | 3,336 | -25.5 | % | ||||||||||||||||||||||||||||||||
|
Consolidated net
income
|
661 | 1,980 | -66.6 | % | 5,826 | 7,103 | -18.0 | % | ||||||||||||||||||||||||||||||||
|
Majority net
income
|
585 | 2.6 | % | 1,932 | 10.5 | % | -69.7 | % | 5,598 | 6.7 | % | 6,908 | 10.0 | % | -19.0 | % | ||||||||||||||||||||||||
|
Minority net
income
|
76 | 48 | 58.3 | % | 228 | 195 | 16.9 | % | ||||||||||||||||||||||||||||||||
|
Operating
income
|
4,053 | 17.8 | % | 3,224 | 17.6 | % | 25.7 | % | 13,695 | 16.5 | % | 11,486 | 16.6 | % | 19.2 | % | ||||||||||||||||||||||||
|
Depreciation
|
640 | 509 | 25.7 | % | 2,528 | 2,050 | 23.3 | % | ||||||||||||||||||||||||||||||||
|
Amortization and other operative
non-cash charges (3)
|
260 | 190 | 36.8 | % | 893 | 898 | -0.6 | % | ||||||||||||||||||||||||||||||||
|
EBITDA (4)
|
4,953 | 21.8 | % | 3,923 | 21.4 | % | 26.3 | % | 17,116 | 20.6 | % | 14,434 | 20.8 | % | 18.6 | % | ||||||||||||||||||||||||
|
(1) Except volume and average price
per unit case figures.
|
|
(2) Sales volume and average price
per unit case exclude beer results
|
|
(3) Includes returnable bottle
breakage expense.
|
|
(4) EBITDA = Operating Income +
depreciation, amortization & other operative non-cash
charges.
|
|
(5) Since november 2007, we
integrated Complejo Industrial CAN, S.A. (CICAN) a can bottling facility
in Argentina.
|
|
Since June 2008,
we integrated Minas Gerais (Remil) in
Brazil.
|
|
February
25, 2009
|
|
Page
21
|
|
Consolidated
Balance Sheet
|
||||
|
Expressed in million of Mexican
pesos, figures of 2007 are expresed with purchasing power as of
December 31, 2007
|
||||
|
Assets
|
Dec
08
|
Dec
07
|
||||||||
|
Current
Assets
|
||||||||||
|
Cash
and cash equivalents
|
Ps.
|
6,192 |
Ps.
|
7,542 | ||||||
|
Total
accounts receivable
|
5,240 | 4,706 | ||||||||
|
Inventories
|
4,313 | 3,418 | ||||||||
|
Prepaid
expenses and other
|
2,239 | 1,792 | ||||||||
|
Total
current assets
|
17,984 | 17,458 | ||||||||
|
Property,
plant and equipment
|
||||||||||
|
Bottles
and cases
|
1,622 | 1,175 | ||||||||
|
Property,
plant and equipment
|
50,925 | 44,140 | ||||||||
|
Accumulated
depreciation
|
(24,388 | ) | (21,682 | ) | ||||||
|
Total
property, plant and equipment, net
|
28,159 | 23,633 | ||||||||
|
Investment
in shares
|
1,797 | 1,476 | ||||||||
|
Deferred
charges, net
|
1,246 | 1,255 | ||||||||
|
Intangibles
assets and other assets
|
48,772 | 43,356 | ||||||||
|
Total
Assets
|
Ps.
|
97,958 |
Ps.
|
87,178 | ||||||
|
Liabilities
and Stockholders' Equity
|
Dec
08
|
Dec
07
|
||||||||
|
Current
Liabilities
|
||||||||||
|
Short-term
bank loans and notes
|
Ps.
|
6,119 |
Ps.
|
4,814 | ||||||
|
Interest
payable
|
267 | 274 | ||||||||
|
Suppliers
|
7,790 | 6,100 | ||||||||
|
Other
current liabilities
|
7,018 | 5,009 | ||||||||
|
Total
Current Liabilities
|
21,194 | 16,197 | ||||||||
|
Long-term
bank loans
|
12,455 | 14,102 | ||||||||
|
Pension
plan and seniority premium
|
936 | 993 | ||||||||
|
Other
liabilities
|
5,757 | 5,105 | ||||||||
|
Total
Liabilities
|
40,342 | 36,397 | ||||||||
|
Stockholders'
Equity
|
||||||||||
|
Minority
interest
|
1,703 | 1,641 | ||||||||
|
Majority
interest:
|
||||||||||
|
Capital
stock
|
3,116 | 3,116 | ||||||||
|
Additional
paid in capital
|
13,220 | 13,333 | ||||||||
|
Retained
earnings of prior years
|
34,346 | 27,930 | ||||||||
|
Net
income for the period
|
5,598 | 6,908 | ||||||||
|
Cumulative
results of holding non-monetary assets
|
(367 | ) | (2,147 | ) | ||||||
|
Total
majority interest
|
55,913 | 49,140 | ||||||||
|
Total
stockholders' equity
|
57,616 | 50,781 | ||||||||
|
Total
Liabilities and Equity
|
Ps.
|
97,958 |
Ps.
|
87,178 | ||||||
|
February
25, 2009
|
|
Page
22
|
|
Mexico
Division
|
|
Expressed in million of Mexican
pesos(1), figures of 2007 are expresed with
purchasing power as of December 31,
2007
|
| 4Q 08 |
% Rev
|
4Q 07 |
% Rev
|
Δ%
|
YTD 08
|
% Rev
|
YTD 07
|
% Rev
|
Δ%
|
|||||||||||||||||||||||||||||||
|
Volume (million unit
cases)
|
282.9 | 272.2 | 3.9 | % | 1,149.0 | 1,110.4 | 3.5 | % | ||||||||||||||||||||||||||||||||
|
Average price per unit
case
|
29.73 | 29.57 | 0.5 | % | 29.30 | 29.18 | 0.4 | % | ||||||||||||||||||||||||||||||||
|
Net
revenues
|
8,411 | 8,048 | 4.5 | % | 33,665 | 32,399 | 3.9 | % | ||||||||||||||||||||||||||||||||
|
Other operating
revenues
|
39 | 41 | -4.9 | % | 134 | 154 | -13.0 | % | ||||||||||||||||||||||||||||||||
|
Total
revenues
|
8,450 | 100.0 | % | 8,089 | 100.0 | % | 4.5 | % | 33,799 | 100.0 | % | 32,553 | 100.0 | % | 3.8 | % | ||||||||||||||||||||||||
|
Cost of
sales
|
4,163 | 49.3 | % | 3,734 | 46.2 | % | 11.5 | % | 16,484 | 48.8 | % | 15,547 | 47.8 | % | 6.0 | % | ||||||||||||||||||||||||
|
Gross
profit
|
4,287 | 50.7 | % | 4,355 | 53.8 | % | -1.6 | % | 17,315 | 51.2 | % | 17,006 | 52.2 | % | 1.8 | % | ||||||||||||||||||||||||
|
Operating
expenses
|
2,447 | 29.0 | % | 2,636 | 32.6 | % | -7.2 | % | 10,600 | 31.4 | % | 10,567 | 32.5 | % | 0.3 | % | ||||||||||||||||||||||||
|
Operating
income
|
1,840 | 21.8 | % | 1,719 | 21.3 | % | 7.0 | % | 6,715 | 19.9 | % | 6,439 | 19.8 | % | 4.3 | % | ||||||||||||||||||||||||
|
Depreciation, amortization &
other operative non-cash charges (2)
|
446 | 5.3 | % | 358 | 4.4 | % | 24.6 | % | 1,671 | 4.9 | % | 1,621 | 5.0 | % | 3.1 | % | ||||||||||||||||||||||||
|
EBITDA (3)
|
2,286 | 27.1 | % | 2,077 | 25.7 | % | 10.1 | % | 8,386 | 24.8 | % | 8,060 | 24.8 | % | 4.0 | % | ||||||||||||||||||||||||
|
(1) Except volume and average price
per unit case figures.
|
|
(2) Includes returnable bottle
breakage expense.
|
|
(3) EBITDA = Operating Income +
Depreciation, amortization & other operative non-cash
charges.
|
|
Latincentro
Division
|
|
Expressed in million of Mexican
pesos(1) figures of 2007 are expresed with
purchasing power as of December 31,
2007
|
| 4Q 08 |
% Rev
|
4Q 07 |
% Rev
|
Δ%
|
YTD 08
|
% Rev
|
YTD 07
|
% Rev
|
Δ%
|
|||||||||||||||||||||||||||||||
|
Volume (million unit
cases)
|
139.9 | 143.6 | -2.6 | % | 537.2 | 534.9 | 0.4 | % | ||||||||||||||||||||||||||||||||
|
Average price per unit
Case
|
53.99 | 39.21 | 37.7 | % | 52.00 | 40.18 | 29.4 | % | ||||||||||||||||||||||||||||||||
|
Net
revenues
|
7,552 | 5,631 | 34.1 | % | 27,933 | 21,491 | 30.0 | % | ||||||||||||||||||||||||||||||||
|
Other operating
revenues
|
5 | 5 | 0.0 | % | 40 | 32 | 25.0 | % | ||||||||||||||||||||||||||||||||
|
Total
revenues
|
7,557 | 100.0 | % | 5,636 | 100.0 | % | 34.1 | % | 27,973 | 100.0 | % | 21,523 | 100.0 | % | 30.0 | % | ||||||||||||||||||||||||
|
Cost of
sales
|
4,437 | 58.7 | % | 3,104 | 55.1 | % | 42.9 | % | 15,622 | 55.8 | % | 11,843 | 55.0 | % | 31.9 | % | ||||||||||||||||||||||||
|
Gross
profit
|
3,120 | 41.3 | % | 2,532 | 44.9 | % | 23.2 | % | 12,351 | 44.2 | % | 9,680 | 45.0 | % | 27.6 | % | ||||||||||||||||||||||||
|
Operating
expenses
|
2,137 | 28.3 | % | 1,845 | 32.7 | % | 15.8 | % | 8,692 | 31.1 | % | 6,978 | 32.4 | % | 24.6 | % | ||||||||||||||||||||||||
|
Operating
income
|
983 | 13.0 | % | 687 | 12.2 | % | 43.1 | % | 3,659 | 13.1 | % | 2,702 | 12.6 | % | 35.4 | % | ||||||||||||||||||||||||
|
Depreciation, amortization &
other operative non-cash charges (2)
|
304 | 4.0 | % | 226 | 4.0 | % | 34.5 | % | 1,092 | 3.9 | % | 886 | 4.1 | % | 23.3 | % | ||||||||||||||||||||||||
|
EBITDA (3)
|
1,287 | 17.0 | % | 913 | 16.2 | % | 41.0 | % | 4,751 | 17.0 | % | 3,588 | 16.7 | % | 32.4 | % | ||||||||||||||||||||||||
|
(1) Except volume and average price
per unit case figures.
|
|
(2) Includes returnable bottle
breakage expense.
|
|
(3) EBITDA = Operating Income +
Depreciation, amortization & other operative non-cash
charges.
|
|
February
25, 2009
|
|
Page
23
|
|
Mercosur
Division
|
|
|
Expressed in million of Mexican
pesos(1), figures of 2007 are expresed with
purchasing power as of December 31, 2007
|
|
|
Financial figures include beer
results
|
|
| 4Q 08 |
% Rev
|
4Q 07 |
% Rev
|
Δ%
|
YTD 08
|
% Rev
|
YTD 07
|
% Rev
|
Δ%
|
|||||||||||||||||||||||||||||||
|
Volume (million unit cases)
(2)
|
177.0 | 142.6 | 24.1 | % | 556.6 | 475.5 | 17.1 | % | ||||||||||||||||||||||||||||||||
|
Average price per unit
case
(2)
|
33.82 | 29.13 | 16.1 | % | 34.11 | 29.16 | 17.0 | % | ||||||||||||||||||||||||||||||||
|
Net
revenues
|
6,634 | 4,584 | 44.7 | % | 20,870 | 15,079 | 38.4 | % | ||||||||||||||||||||||||||||||||
|
Other operating revenues
(5)
|
111 | 52 | 113.5 | % | 334 | 96 | 247.9 | % | ||||||||||||||||||||||||||||||||
|
Total
revenues
|
6,745 | 100.0 | % | 4,636 | 100.0 | % | 45.5 | % | 21,204 | 100.0 | % | 15,175 | 100.0 | % | 39.7 | % | ||||||||||||||||||||||||
|
Cost of
sales
|
3,692 | 54.7 | % | 2,512 | 54.2 | % | 47.0 | % | 11,789 | 55.6 | % | 8,486 | 55.9 | % | 38.9 | % | ||||||||||||||||||||||||
|
Gross
profit
|
3,053 | 45.3 | % | 2,124 | 45.8 | % | 43.7 | % | 9,415 | 44.4 | % | 6,689 | 44.1 | % | 40.8 | % | ||||||||||||||||||||||||
|
Operating
expenses
|
1,823 | 27.0 | % | 1,306 | 28.2 | % | 39.6 | % | 6,094 | 28.7 | % | 4,344 | 28.6 | % | 40.3 | % | ||||||||||||||||||||||||
|
Operating
income
|
1,230 | 18.2 | % | 818 | 17.6 | % | 50.4 | % | 3,321 | 15.7 | % | 2,345 | 15.5 | % | 41.6 | % | ||||||||||||||||||||||||
|
Depreciation, Amortization &
Other operative non-cash charges (3)
|
150 | 2.2 | % | 115 | 2.5 | % | 30.4 | % | 658 | 3.1 | % | 441 | 2.9 | % | 49.2 | % | ||||||||||||||||||||||||
|
EBITDA (4)
|
1,380 | 20.5 | % | 933 | 20.1 | % | 47.9 | % | 3,979 | 18.8 | % | 2,786 | 18.4 | % | 42.8 | % | ||||||||||||||||||||||||
|
(1) Except volume and average price
per unit case figures.
|
|
(2) Sales volume and average price
per unit case exclude beer results
|
|
(3) Includes returnable bottle
breakage expense.
|
|
(4) EBITDA = Operating Income +
Depreciation, amortization & other operative non-cash
charges.
|
|
(5)
Since november 2007,
we integrated Complejo Industrial CAN, S.A. (CICAN) a can bottling
facility in Argentina.
|
|
Since June 2008,
we integrated Minas Gerais (Remil) in
Brazil.
|
|
February
25, 2009
|
|
Page
24
|
|
SELECTED
INFORMATION
|
|
For
the three months ended December 31, 2008 and 2007
|
|
Expressed
in million of Mexican pesos. Figures of 2007 are expresed with purchasing
power as of December 31,
2007
|
| 4Q 08 | 4Q 07 | |||||||||||||||||||||||||||||||||||||||
|
Capex
|
1,937.6 |
Capex
|
1,297.2 | |||||||||||||||||||||||||||||||||||||
|
Depreciation
|
640.0 |
Depreciation
|
509.0 | |||||||||||||||||||||||||||||||||||||
|
Amortization
& Other non-cash charges
|
260.0 |
Amortization
& Other non-cash charges
|
190.0 | |||||||||||||||||||||||||||||||||||||
|
VOLUME
|
||||||||||||||||||||||||||||||||||||||||
|
Expressed
in million unit cases
|
||||||||||||||||||||||||||||||||||||||||
| 4Q 08 |
4Q 07
|
|||||||||||||||||||||||||||||||||||||||
|
Sparkling
|
Water
(1)
|
Bulk
Water
(2)
|
Still
(3)
|
Total
|
Sparkling
|
Water
(1)
|
Bulk
Water
(2)
|
Still
(3)
|
Total
|
|||||||||||||||||||||||||||||||
|
Mexico
|
212.8 | 9.9 | 48.1 | 12.1 | 282.9 | 216.2 | 10.4 | 43.0 | 2.6 | 272.2 | ||||||||||||||||||||||||||||||
|
Central
America
|
30.4 | 1.4 | - | 2.4 | 34.2 | 30.6 | 1.4 | - | 1.9 | 33.9 | ||||||||||||||||||||||||||||||
|
Colombia
|
47.2 | 2.4 | 2.4 | 2.6 | 54.6 | 46.4 | 2.9 | 2.6 | 0.8 | 52.7 | ||||||||||||||||||||||||||||||
|
Venezuela
|
46.5 | 3.0 | - | 1.6 | 51.1 | 51.8 | 3.2 | - | 2.0 | 57.0 | ||||||||||||||||||||||||||||||
|
Latincentro
|
124.1 | 6.7 | 2.4 | 6.6 | 139.9 | 128.8 | 7.5 | 2.6 | 4.7 | 143.6 | ||||||||||||||||||||||||||||||
|
Brazil
|
111.8 | 6.5 | - | 3.1 | 121.4 | 80.8 | 5.6 | - | 1.3 | 87.7 | ||||||||||||||||||||||||||||||
|
Argentina
|
52.5 | 0.6 | - | 2.5 | 55.6 | 52.6 | 0.7 | - | 1.6 | 54.9 | ||||||||||||||||||||||||||||||
|
Mercosur
|
164.3 | 7.2 | - | 5.6 | 177.0 | 133.4 | 6.3 | - | 2.9 | 142.6 | ||||||||||||||||||||||||||||||
|
Total
|
501.2 | 23.8 | 50.5 | 24.3 | 599.8 | 478.4 | 24.2 | 45.6 | 10.2 | 558.4 | ||||||||||||||||||||||||||||||
|
(1)
Excludes water presentations larger than 5.0 Lt
|
|
(2)
Bulk Water = Still bottled water in 5.0, 19.0 and 20.0 - liter
packaging presentations
|
|
(3)
Still Beverages include flavored
water
|
|
|
·
|
Volume of Brazil, Mercosur
division, and Consolidated for quarterly results includes tree months of
Remil’s operation, accounting for 31.3 million unit
cases.
|
|
SELECTED
INFORMATION
|
|
For
the twelve months ended December 31, 2008 and 2007
|
|
Expressed
in million of Mexican pesos. Figures of 2007 are expresed with purchasing
power as of December 31, 2007
|
|
YTD
08
|
YTD
07
|
|||||||||||||||||||||||||||||||||||||||
|
Capex
|
4,802.1 |
Capex
|
3,682.1 | |||||||||||||||||||||||||||||||||||||
|
Depreciation
|
2,528.0 |
Depreciation
|
2,050.0 | |||||||||||||||||||||||||||||||||||||
|
Amortization
& Other non-cash charges
|
893.0 |
Amortization
& Other non-cash charges
|
898.0 | |||||||||||||||||||||||||||||||||||||
|
VOLUME
|
||||||||||||||||||||||||||||||||||||||||
|
Expressed
in million unit cases
|
||||||||||||||||||||||||||||||||||||||||
|
YTD
08
|
YTD
07
|
|||||||||||||||||||||||||||||||||||||||
|
CSD
|
Water
|
Jug
Water
|
Other
|
Total
|
CSD
|
Water
(1)
|
Jug
Water
|
Other
|
Total
|
|||||||||||||||||||||||||||||||
|
Mexico
|
866.7 | 53.1 | 195.2 | 34.0 | 1,149.0 | 869.5 | 47.0 | 182.4 | 11.5 | 1,110.4 | ||||||||||||||||||||||||||||||
|
Central
America
|
117.8 | 5.6 | - | 9.2 | 132.6 | 115.0 | 5.5 | - | 7.6 | 128.1 | ||||||||||||||||||||||||||||||
|
Colombia
|
172.4 | 9.9 | 9.8 | 5.8 | 197.9 | 173.3 | 11.0 | 10.8 | 2.7 | 197.8 | ||||||||||||||||||||||||||||||
|
Venezuela
|
188.7 | 11.9 | - | 6.1 | 206.7 | 189.0 | 11.8 | - | 8.2 | 209.0 | ||||||||||||||||||||||||||||||
|
Latincentro
|
478.9 | 27.4 | 9.8 | 21.1 | 537.2 | 477.3 | 28.3 | 10.8 | 18.5 | 534.9 | ||||||||||||||||||||||||||||||
|
Brazil
|
341.1 | 21.2 | - | 8.3 | 370.6 | 271.6 | 19.9 | - | 4.6 | 296.1 | ||||||||||||||||||||||||||||||
|
Argentina
|
176.7 | 2.4 | - | 6.9 | 186.0 | 172.6 | 1.7 | - | 5.1 | 179.4 | ||||||||||||||||||||||||||||||
|
Mercosur
|
517.8 | 23.6 | - | 15.2 | 556.6 | 444.2 | 21.6 | - | 9.7 | 475.5 | ||||||||||||||||||||||||||||||
|
Total
|
1,863.4 | 108.1 | 201.0 | 70.3 | 2,242.8 | 1,791.0 | 96.9 | 193.2 | 39.7 | 2,120.8 | ||||||||||||||||||||||||||||||
|
(1)
Excludes water presentations larger than 5.0 Lt
|
|
(2)
Bulk Water = Still bottled water in 5.0, 19.0 and 20.0 - liter
packaging presentations
|
|
(3)
Still Beverages include flavored
water
|
|
|
·
|
Volume of Brazil, Mercosur
division, and Consolidated for the twelve months results includes seven
months of Remil’s operation, accounting for 66.1 million unit
cases.
|
|
February
25, 2009
|
|
Page
25
|
|
December
2008
|
|
Macroeconomic
Information
|
|
Inflation
(1)
|
Foreign
Exchange Rate (local currency per US Dollar) (2)
|
|||||||||||||||
|
LTM
|
4Q 2008 |
Dec
08
|
Dec
07
|
|||||||||||||
|
Mexico
|
6.52 | % | 2.53 | % | 13.5383 | 10.8662 | ||||||||||
|
Colombia
|
7.67 | % | 1.07 | % | 2,243.59 | 2,014.76 | ||||||||||
|
Venezuela
(3)
|
30.90 | % | 7.48 | % | 2.1500 | 2,150 | ||||||||||
|
Brazil
|
6.48 | % | 1.17 | % | 2.3370 | 1.7713 | ||||||||||
|
Argentina
|
7.24 | % | 1.11 | % | 3.4530 | 3.1490 | ||||||||||
|
(1)
Source: Mexican inflation is published by Banco de México
(Mexican Central Bank).
|
|
(2)
Exchange rates at the end of period are the official exchange rates
published by the Central Bank of each country.
|
|
(3)
In Venezuela since January 1, 2008, the local currency is 'Bolivar
Fuerte', 'Bolivar' the former currency, was divided by one
thousand.
|
|
February
25, 2009
|
|
Page
26
|